Emerging Market ETF Inflows Slow Amid Longest Gains This Year

Investor inflows to U.S. exchange traded funds that buy emerging market stocks and bonds slowed in the week ended Feb. 26, though ETFs posted the first back-to-back increases this year.

Deposits into emerging-market ETFs that invest across developing nations as well as those that target specific countries totaled $139.4 million, down from $242 million in the previous week, according to data compiled by Bloomberg. So far this year, the funds are down $5.35 billion.

Last week, stock funds collected $14.8 million and bond funds advanced by $124.6 million. The MSCI Emerging Markets Index declined 0.1 percent in the week.

The biggest change was in Mexico, where funds shrank by $16 million, compared with $30.3 million of inflows the previous week. Investors withdrew $25.3 million from stock funds and added $9.3 million to bonds.

The Mexico IPC Index advanced 0.2 percent. The peso weakened 0.29 percent against the dollar and implied three-month volatility is 13.2 percent.

Indonesia had the next-biggest change, with ETF investors adding $14.9 million, compared with $51.2 million of inflows the previous week. Stock funds grew by $7.3 million and bond ETFs increased by $7.5 million.

The Jakarta Composite Index gained 0.8 percent. The rupiah appreciated 0.95 percent against the dollar and implied three-month volatility is 12.01 percent.

Following is a table detailing net inflows and outflows for emerging-market ETFs. The data include the index-weighted allocations from the biggest multi-country funds, such as the Vanguard FTSE Emerging Markets ETF and iShares MSCI Emerging Markets ETF, as well
as country-specific funds:

Flow WeekFlow %EquityBondFX
RegionEnd Feb. 26ChangeFlowFlowChange
================================================================================
Total EM Flow139.4-42.4%14.8124.6n/a
Malaysia21.2371.26%14.86.4-0.12%
South Korea21.2n/a21.3-0.1-0.30%
India16.247.82%16.4-0.2-0.24%
South Africa15.0121.78%9.55.5-4.76%
Indonesia14.9-71.02%7.37.50.95%
Poland12.3-13.94%4.97.4-1.81%
Taiwan11.8740.68%11.80.0-0.27%
Brazil11.5114.30%4.76.70.55%
Philippines10.9-12.32%4.96.00.27%
Russia8.6-70.35%2.36.30.89%
Chile7.8-37.33%4.92.91.20%
Colombia7.433.80%1.75.60.42%
Thailand6.6127.20%3.43.2-0.01%
Peru4.5-9.00%0.34.2-0.26%
Argentina2.3-38.14%-0.12.3-2.60%
U.A.E.1.4246.91%1.40.00.00%
Egypt0.9-5.32%0.30.70.02%
Qatar0.4-46.53%0.40.00.01%
Turkey-0.8-110.49%-8.37.5-1.47%
Nigeria-2.3#DIV/0!-2.20.0-0.25%
Vietnam-4.531.23%-4.70.30.15%
Singapore-11.2n/a-11.0-0.2-0.19%
Mexico-16.0-152.61%-25.39.3-0.29%
China and Hong Kong-34.4-46.05%-33.1-1.4-0.28%
================================================================================
*T
NOTE1: For further ETF analysis, download the ETF workbook: XLTP XETFM
NOTE2: For Bloomberg’s ETF screener: ETF
NOTE3: Currency performance for China and Hong Kong is based on the yuan,
stock index uses the Shanghai Composite Index.
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